The Goods and Services Tax bill(GST tax bill)tax accountant, touted to be India’s biggest tax reform, will simplify the current system of taxation. The bill will convert the country into a unified market by replacing all indirect taxes with one tax accountant.

What is the GST bill? Here’s all you need to know about GST tax bill business activity statement:

Quite literally, GST tax bill (Goods and Services Tax) is a tax levied when a consumer buys a good or service.

The current tax regime is riddled with indirect taxes which the GST aims to subsume with a single comprehensive tax, bringing it all under a single umbrella. The GST tax bill aims to eliminate the cascading effect of taxes on production and distribution prices on goods and services.

What is the effect of GST taxation?

Cascading effect of taxes is caused due to levy of different charges by state and union governments separately. In the current multi-staged tax-structure, the following taxes are levied by the centre and state separately:

The Goods and Services Tax (GST tax bill) has been finalised for almost all items by the GST Council led by Finance Minister Arun Jaitley. The council concluded its 16th meeting on June 11 where rates for many items were revised.

How does GST tax bill works?Business activity statement:

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With GST round the corner, the confusion about its understanding still exists. Though the concept is simple, many, especially the laymen, find it difficult to comprehend. The purpose of this post is to explain, in simple terms, the advantage of GST compared to the conventional system.

How GST tax bill Work?

States will be compensated for any revenue loss from GST implementation for five years, When GST or goods or services tax rolls out on July 1, it will be the biggest tax reform since Independence. GST will subsume a large number of central and state taxes into a single tax, paving the way for a common national market. From free flow of goods and services to elimination of cascading of taxes, the potential benefits to Indian economy are many. It is estimated that GST could raise GDP or gross domestic product growth by 1.5-2 per cent in the long term.

GST is indirect tax and GST is destination based tax, as against precent tax system and it is origin based taxation. The new tax system follows a multi-stage collection mechanism and present tax system collected at every stage, GST tax bill helps to eliminate “tax on tax” and GST tax bill helps to reduce the tax on items

For example, a manufacturer’s total tax on output comes to Rs. 10,000 while tax paid on input (purchases) is Rs. 6,000. In this case, the manufacturer needs to deposit only Rs. 4,000 (Rs. 10,000 – Rs. 6,000) as tax, after claiming credit of Rs. 6,000, thus reducing the overall incidence of tax on final product. But credit available to the recipient (the manufacturer in this case) only if invoice is matched. So GST helps in checking evasion of taxes.Most of the goods and services have been listed under the four broad tax slabs- 5 per cent, 12 per cent, 18 per cent and 28 per cent. However, some items like gold and rough diamonds have exclusive tax rates. Also, some items have been exempted from taxation.

How Will New Taxation System GST Work?business activity statement

GST tax starts from 01 july 2017, GST tax bill is biggest reform after so many years in Indian tax system, GST tax bill combines all large number of (central and state) taxes into single tax called GST tax . GST tax bill could raise GDP or gross domestic product growth by 1.5-2 per cent in the long term. GST tax bill helps to get more tax , so this tax can be used to devlop india.

GST rates: GST rates on goods and services have been broadly classified into four tax rates: 5 per cent, 12 per cent, 18 per cent and 28 per cent. Some items and services are not listed in GST Rates. Precious metals like gold will attract a separate tax rate of 3 per cent. A cess will be levied over the peak rate of 28 per cent on specified luxury and sin goods. Under GST, businesses are required to file returns each month. But the government has let companies file late returns for the first two months so that they can adapt to a new online filing system.

CGST, SGST, IGST: The GST to be levied by the Centre would be called Central GST (CGST) and that to be levied by the States (including Union territories with legislature) would be called State GST (SGST). An Integrated GST (IGST) would be levied on inter-State supply (including stock transfers) of goods or services. This would be collected by the Centre. Import of goods would be treated as inter-State supplies and would be subject to IGST in addition to the applicable customs duties. Exports will be treated as zero-rated supplies which means no tax will be payable on exports of goods or services. However, exporters can claim input tax credit.

What is the difference Between Present Tax Structure & GST, GST VAT Difference

Difference between VAT and GST : See what is the difference between precent tax system and GST tax bill , you can see all the difference in this article, like difference between Broad scheme , Tax Rates, Tax burden, Concurrent and Difference between Tax Administration .

VAT is applicable for goods sold and not service. Service tax takes care of services rendered. However, GST tax bill will be applicable for both goods and services, and will have a uniform pricing.

Very simply put, VAT is the tax a manufacturer has to pay for the additional value created. So, if the raw material costs INR 50 and finished product costs INR 100, the value added to raw material is INR 50.

However, the VAT applicable on INR 100 and INR 50 will be based on the VAT guidelines and the difference of those tax amounts needs to be paid by the manufacturer.

GST is essentially riding on the VAT calculation but with uniform taxation across goods and services. This is exceptionally easy computability as some goods are sold as services, like a food in a restaurant, and vice versa.

The proposed framework rides on the current principles but is slightly different when it calculates the interstate sales. The interstate sales are handled by an integrated GST model. This system ensures correct allocation of SGST and CGST, and the correct flow of money between the state and central exchequers.

Gold: GST tax bill has fixed the tax rate of the precious metal at 3 per cent. GST Council on June 3 created a new tax bracket for gold, diamonds and silver. The current excise duty on gold was 1 per cent and 1 per cent VAT in many states. With 3 per cent GST, Gold is set to become costlier July onward.

Insurance: Premiums are set to rise on car, health and and term insurance with the government. Currently, insurance is taxed at 15 per cent. Under GST tax bill, this would go up to 18 per cent.

Banking Charges: Transaction fee on various banking and financial services are expected to go up as GST tax bill, will tax these services under 18 per cent tax rate from the current 15 per cent.

Hotel Bookings: GST tax bill on hotel services will depending on the kind of room you stay in. If the room tariff is less than Rs 1,000, your stay will be tax free. However, if the room tariff is between Rs 1,000 – Rs 2,500, you’ll be taxed 12 per cent. It the tariff is between Rs 2,500 to Rs 5,000, the stay will be taxed at 18 per cent according to GST tax bill. For luxury hotels, where the tariffs are more than Rs 5,000, GST rate of 28 per cent will be applicable.

Eating Out: According GST tax bill there are different tax slabs for restaurants depending on their turnover and whether they have air-conditioning or or not.

Restaurants with a turnover of less than Rs 50 lakh will be levied a tax rate of 5 per cent.
Non-AC restaurants will be charged 12 per cent GST on food bill. Tax rate for AC restaurants and those with liquor licence will be 18 per cent, whereas restaurants in 5-star hotels will attract a GST rate of 28 per cent.

Eating out will get costlier in cities like Mumbai where the existing tax rate is around 10.6 per cent – which includes both VAT and Service tax. Post GST, the customers will be taxed at 18 per cent in AC restaurants.

For a non-AC restaurant in Mumbai, the current tax rate is at 6 per cent. From July 1, small joints will be taxed at 12 per cent.

Telecom Bills: Your mobile and internet bills are expected to rise once GST comes into force. Currently, there is a 15 per cent service tax on telecoms services. Under GST, the tax rate applicable will be 18 per cent. The industry, which is already stressed with the launch of Reliance Jio, is expected to pass on these charges to customers.

Movie Tickets: During a GST Council meet in Srinagar, Finance Minister Arun Jaitley had said movie tickets in cinema halls will be taxed at 28 per cent.

Currently, there is service tax on cinema and states have separate entertainment taxes. Maharashtra levies more around 50 per cent entertainment tax on movie tickets. In Uttar Pradesh (UP) entertainment tax is around 30-40 percent.

Even though the tax rate under the GST will be lower than entertainment taxes levied in some states, movie ticket prices in big multiplexes may remain same as the government plans to increase tax on junk food and aerated drinks.

Medicines: While there may not be a huge impact of GST on medicines, but a tax rate of 5 per cent on life-saving drugs that treat diseases like malaria, HIV-AIDS, tuberculosis, and diabetes is expected to marginally increase prices of these drugs.

Until now, these drugs were exempted from excise and customs duties. However, a few states were charging 5 per cent tax on these drugs which will now be subsumed under GST. Under GST, there will be a 12 per cent on formulations and 18 per cent on APIs (active pharmaceutical ingredients) – the bulk drugs that go into the making of final pills and tablets.

Cab rides: Cab fares could get marginally cheaper for customers from July 1 as the incidence of tax will come down to five per cent for bookings made on cab aggregators like Ola and Uber. Currently, a tax of six per cent is levied on rides booked through cab aggregators.

Tobacco products: Filter and non-filter cigarettes not exceeding 65 mm will attract cess of 5 per cent plus Rs 1,591 per 1000 sticks. For cigars, a hefty levy of 21 per cent or Rs 4,170 per 1000 sticks, whichever is higher, would be levied. Branded gutkha will be slapped with a cess of 72 per cent, while smoking mixtures for pipes and cigarettes will attract a levy 290 per cent.

Bikes: Motorcycles of more than 350 cc engine capacity will attract a total of 31 per cent tax under the GST regime, same as the tax incidence on private aircraft and luxury yachts.

Cars: All cars fall in the ‘luxury bracket’ of GST. That means they will attract 28 per cent tax. However, depending on their size, extra cess will be levied.

Small cars or cars under four-metre length powered by a petrol engine not greater than 1.2-litre or a diesel engine not greater than 1.5-litre by displacement will be taxed at 28 per cent. For petrol cars, the effective tax rate will be 29 per cent. However, for diesel cars the effective tax rate will be 31 per cent.

For mid-size, luxury cars and SUVs the effective tax rate will be 43 per cent. The prices of SUVs are expected to come down as they are currently taxed at 48-55 per cent.

The government said it would tax hybrid vehicles at a rate as high as 43 percent. This would be significantly higher than the prevailing tax of about 29 percent on such cars.
Air Travel: Economy class air travel will become cheaper with tax rate fixed at 5 per cent against the existing 6 per cent, under the upcoming goods and services tax (GST) regime from 1 July. However, for those travelling business class, tickets will become dearer as the tax will go up from 9 per cent to 12 per cent.

No Tax Items: Daily items like milk, paneer and curd won’t be taxed under the GST. The GST Council decided not to tax metro travel, religious travel and Haj yatra under the new tax structure. There won’t be any tax on healthcare and education under the new taxation system. Basic food items like cereals, eggs and meat will attract no tax after the GST is effective.

Prices of food grains, especially wheat and rice, will come down as they will be exempt from the GST. However, packaged food items will be taxed at 5 per cent.

Coal: electricity generation will get cheaper as the GST council has brought down the current tax on coal to 5 per cent from the current tax rate of 11.69 per cent. Sweets will attract 5 per cent tax under the GST.

Daily use items: Household items like sugar, tea, coffee (barring instant coffee) and edible oil will attract the lowest tax rate of 5 per cent, almost the same as under the current tax structure.

Common use products like hair oil, soaps and toothpaste will be charged with a single national sales tax or GST of 18 per cent instead of present 22-24 per cent tax.

Meat: Animal slaughtering and services provided by veterinary clinics will be exempt from GST.

Entertainment: Visits to theme parks and sporting events like IPL will attract a levy of 28 per cent under the new indirect tax regime kicking in from July 1.

Railways: Non AC train travel, including in local trains and metro, has been exempt from GST, while AC train travel will attract 5 per cent service tax. Ticket prices for AC trains will increase marginally as current service tax is at 4.5 per cent.

Maintenance Charges: Flat owners who pay Rs 5,000 or more every month as maintenance charges, excluding property tax, stamp duty and utilities charges, will have to pay GST on the increased tax rates. As of now, tax levied is levied at 15.55 per cent on maintenance charges, which will be replaced with 18 per cent after GST is implemented.

Smartphones: According to GST tax bill, smartphone currently attracts two per cent central excise duty, besides the value-added tax (VAT), which vary from state to state (five per cent to 15 per cent). Under GST, smartphones will be taxed at flat 12 per cent.

Cement: Prices of packaged cement is expected to come down marginally as it would be taxed at 28 per cent under the GST as against 31 per cent currently on account of different indirect taxes.

Ayurveda: According to GST tax bill Ayurvedic products are set to get costlier as the government has kept these products in the 12 per cent bracket. Ayurveda products currently attract a 8-9 per cent levy.

Here is the list of goods, their current effective tax rates and respective GST tax bill rates under the new tax system, according to professional services firm EY:

Vehicles for transport with 10 to 13 passenger capacity (cannot be considered as bus)

39-41

28+15

Motorcycles

25-35

28

Motorcycles Engine >350

25-35

28+3 (cess)

Television

25-27

28

Stationery (Plastics)

11-27

18

Stationery (Paper)

12 and 18

Rates revised on following items from 18% to 12% – Exercise books and note books

Stationery (Pen/Fountain Pen)

Rates revised on following items from 18% to 12% – Eraser

Renewable energy devices

17-18

5

Iron Ore

17-18

5

Digital Cameras

25-27

28

Luxury items like yacht

25-27

28+3 (cess)

Music Instruments (Handmade)

0-12.5

0

Music Instruments (Other than Handmade)

25-27

28

GST Tax on dividend income received by individual/HUF/firms

Dividend income received by individuals is taxed based on the source of dividend income i.e. the type of entity declaring the dividend income

Source of Dividend Income

Tax Rate for Individuals/HUFs

Income Tax Section

Domestic Company

-if aggregate dividend income received during the year is less than Rs. 10 lakh

Nil

Section 10(34)

-if aggregate dividend income received during the year is more than Rs. 10 lakh

10%

Section 115BBDA

Foreign Company

As per the marginal tax rate applicable to the tax payer

Section 115BBD

Debt Mutual Fund

Nil

Section 10(35)

Equity Mutual Fund

Nil

Section 10(35)

Dividend income received from a domestic company according to new GST tax bill

As per section 10(34) of Income Tax Act, any income received by an individual/HUF as dividend from an Indian company is exempt from tax as the company declaring such dividend has already deducted dividend distribution tax before paying the dividend.

However, under Section 115BBDA (as introduced in the Finance Act, 2016), if aggregate dividend received by an individual/HUF from companies exceeds Rs. 10,00,000, it is liable to pay tax at the rate of 10% on dividend income received in excess of Rs. 10 lakh. Section 115BBDA applies only on dividend income received from domestic companies under Section 10(34) and excludes dividend income received from mutual funds under Section 10(35).

Illustration 1: Tax at the rate of 10% on dividend income received by Indian company under section 15BBDA

Mr. Mehta received Rs. 15 lakh as dividend from various Indian companies during the FY16-17. Since, his dividend income for the year exceeds Rs. 10 lakh; he is liable to pay tax at the rate of 10% on excess dividend income earned over Rs. 10 lakh. In this case, he is liable to pay a tax of 10 % on Rs. 5 lakh (dividend income in excess of Rs. 10 lakh), which translates into a tax liability of Rs. 50,000.

Dividend income received from a foreign company

As per Section 115BBD of Income Tax Act, dividend received by an individual/HUF from a foreign company is fully taxable under the head “Income from other sources”. The dividend received is included in the total income of the recipient taxpayer and will be charged according to the income tax rate slabs applicable to the taxpayer.

Dividend income received from debt and equity mutual funds

As per section 10(35) of Income Tax Act, any income received by an individual/HUF as dividend from a debt mutual fund scheme or an equity mutual fund scheme is fully exempt from tax. In addition to tax in the hand of investors, dividends declared by domestic companies also attract a Dividend Distribution Tax (DDT). DDT varies by the type of entity declaring the dividend.

Type of entity declaring dividend

Dividend distribution tax rate for Individuals/HUFs

Relevant section of Income Tax Act

Domestic companies

17.304% (including 10% surcharge and 3% education cess)

Section 115-O

Equity mutual funds

Nil

Section 115-R

Debt mutual funds (including liquid mutual funds)

At the rate of 28.84% (including surcharge and cess)

Section 115-R

Foreign companies

Nil

Dividend Distribution Tax to be paid by the company according to new GST tax bill

Dividend distributed by a domestic company

As per section 115-O, domestic companies declaring dividends are liable to pay dividend distribution tax before crediting the dividend in the account of its shareholders. The rate of dividend distribution tax varies by type of entity declaring the dividend. A domestic company has to pay the dividend distribution tax of 15 % plus a 10% surcharge and 3% education cess which translates into an effective tax rate of 17.304%.

Illustration 2: A company declared a dividend of Rs. 200 to its shareholders. The company is liable to pay a dividend distribution tax of 17.304%, which translates into a tax liability of Rs. 35. The company will have to deduct this tax before crediting the dividend to the account of its shareholders which in this case will be an amount of Rs. 165.

Dividend distributed by a foreign company according to GST tax bill

A foreign company is exempted from paying dividend distribution tax on dividend paid to its shareholders.

Dividend distributed by equity mutual funds according to GST tax bill

Dividend or income distributed on debt mutual funds is subject to a dividend distribution tax at the rate of 28.33% (including surcharge and cess) for Individuals and HUF investors. DDT is deducted from dividend before the mutual fund credits dividend in the account of debt mutual fund holders.

Dividend distributed by debt mutual funds according to GST tax bill

Dividend or income distributed on equity mutual funds is tax exempt and do not attract dividend distribution tax.

See GST New Registration Procedure – Step by Step

For registering yourself as a normal taxpayer, perform the following steps:

1. Access the https://www.gst.gov.in/ URL. The GST Home page is displayed.

2. Click the Services > Registration > New Registration option.

Alternatively, you can also click REGISTER NOW link.

The Application form is divided into two parts as Part A and Part B.

Part A:

3. The New Registration page is displayed. Select the New Registration option.

4. In the I am a drop down list, select the Taxpayer as the type of taxpayer to be registered.

5. In the State/UT and District drop down list, select the state for which registration is required and district.

6. In the Legal Name of the Business (As mentioned in PAN) field, enter the legal name of your business/ entity as mentioned in the PAN database.

7. In the Permanent Account Number (PAN) field, enter PAN of your business or PAN of the Proprietor.

Documents needed for registration

PAN is mandatory for registration with GST tax bill.

In case you don’t have PAN to apply for GST tax bill , you can apply for PAN.

8. In the Email Address field, enter the email address of the Primary Authorized Signatory.

9. In the Mobile Number field, enter the valid Indian mobile number of the Primary Authorized Signatory.

Note: Different One Time Password (OTP) will be sent on your email address and mobile number you just mentioned for authentication while registaring for GST tax bill.

GST Registration Date Extended for 3 months – Good News for all Existing Tax Payers, GST Registration or GST Migration Window is again Start from 25th June 2017 and ended on 30th September 2017 (30-09-2017).

GST tax bill would apply to all goods other than crude petroleum, motor spirit, diesel, aviation turbine fuel and GST tax bill natural gas. GST tax bill would apply to all services barring a few to be specified. With the increase of international trade in services, GST tax bill has become a global standard. GST tax bill will ensure that indirect tax rates and structures are common across India and increase the ease of doing business. This would make doing business in the country tax neutral, irrespective of the choice of place of doing business.